Kenyan Central Bank Warns that BTC is Unregulated. No Mention of Inflation

Central Bank of Kenya has warned public against Bitcoin and other virtual currencies citing its non legal tender and no regulated status.

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The Central Bank of Kenya has warned the public against Bitcoin and other virtual currencies, citing that it’s not legal tender and is unregulated. People should therefore desist from transacting in Bitcoin and similar products.

There are not many countries left in the world with a buoyant Bitcoin market where the central bank hasn't issued a cautious statement on using cryptocurrency. Now Kenya joins the club of frightened central bankers. “Domestic and international money transfer services in Kenya are regulated by the Central Bank of Kenya Act and other legislation. In this regard, no entity is currently licensed to offer money remittance services and products in Kenya using virtual currencies such as Bitcoin,“ the bank said in it’s announcement.

Of course the bank uses the same old rhetoric, saying “(there is) no protection when transacting, the possibility of abuse by criminals in money laundering, terrorism finance, no underlying asset or speculative nature of the value...“

"These types of government-issued warnings are always amusing because they act as if their own monopoly legal tender is the paragon of safety and stability while simultaneously ignoring the actual, real consumer benefits of Bitcoin," Jon Matonis, former Executive Director of Bitcoin Foundation comments for CT.

“As the most counterfeit-proof currency in existence today, Bitcoin protects consumers from the risk of accepting or receiving counterfeit bank notes in commerce, which continues to plague the world's fiat note issuers. Using Bitcoin because it doesn't come with government assurances is like not flying because you might fall out of the sky. Bitcoin, with its fixed and predictable supply, provides an alternative store of value to the currency of nations with printing presses run amok,“ adds J. Matonis.

1 Bitcoin is currently worth 45 300 Kenyan Shillings (KES). It costed 32 770 KES/BTC a month ago and 24 400 KES/BTC three months ago. However the maximum of December 2013 of 90 000 KES/BTC have not been reached yet.